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Central Motek and Emsco sign contracts to invest in and enter the Daegu National Industrial Park
Daegu Metropolitan City continues to solidify its status as a hub city for futuristic cars by attracting a succession of offshore companies producing spare auto parts. The city signed investment contracts with Central Motek (May 23) and Emsco (May 25).
□ On May 23 at 11:30 am, Daegu Mayor Kwon Young-jin and CEO Kim Jong-tae of Central Motek (based in Changnyeong, Gyeongsangnam-do) signed an investment contract in the Situation Room of Daegu City Hall. In the presence of CEO Kim and Central Motek executives, the two parties signed an investment agreement welcoming Central Motek into the Daegu National Industrial Park (DNIP).
○ Under the terms of the agreement, Central Motek will complete construction of a plant (approx. 9,000 pyeong) inside the DNIP by 2018. The plant, to be built using a total investment of KRW 100 billion, will be dedicated to the production of Central Motek’s new gear shift product (ball screw). The completed construction and opening of the plant will mark the first-ever successful case of full localization in Korea.
○ The local/domestic production of the ball screw, which is currently being exclusively supplied to the Korean market by the German company Schaeffler, is expected to not only contribute to increased corporate revenue but also play a major role in the transformation of Daegu into a hub for futuristic cars.
○ Since its founding in 1994, Central Motek has been a key affiliate of Central Group. A company with 145 employees that specializes in the production of running gear, Central Motek saw revenue totaling KRW 251.2 billion in 2016 alone. Through its investment in Daegu, Central Motek aims to expand its business and engage in partnered growth with other Central Group affiliates (through the creation of a “Central Cluster”) and local companies in related fields. As for Daegu, the city is expected to become one step closer to becoming an industrial hub for spare auto parts.
○ Known for its competitive technologies and aggressive pioneering of overseas markets, Central Group is a top-notch, medium-sized Korean company that supplies its products to 113 client companies (including Hyundai-Kia Motors, GM, Mercedes-Benz, BMW, and Audi) in 67 countries (including in the US, Europe, and South America). In 2016, the group’s revenue totaled KRW 1.1 trillion. In March, Central DTS (a powertrain manufacturer and another Central Group affiliate) constructed a plant inside the DNIP that is currently in full operation.
□ On May 25, Daegu Metropolitan City signed an investment contract at the Daegu City Hall annex with Emsco for the transfer of its headquarters and plant to the DNIP.
○ Emsco is a small but highly promising Changwon-based company that produces auto parts such as gears in addition to spare parts for pumps and valves. Established in 1986 as the Jinbo Precision Industry Co., the company has demonstrated consistent annual growth, achieving KRW 33 billion in revenue in 2016. Investing KRW 17.2 billion, Emsco is scheduled to complete a 3,500-pyeong plant inside the DNIP by late 2018. The completed plant is expected to accelerate the creation of a “new industry belt” for national industrial complexes in the Yeongnam area.
○ The arrival of Emsco, which specializes in the production of commercial vehicle brake valves, is expected to create a synergy effect for the production of electric freight trucks in the region by Renault Samsung Motors and Dae-il Corporation by the second half of 2017.
□ Daegu Mayor Kwon Young-jin said of the recent agreements, “With the decision of Central Motek and Emsco to invest in Daegu, Daegu has gained a powerful driving force that will enable it to attain its dream of becoming a hub city for futuristic cars. We of course could not be more grateful for the local investment and creation of jobs, but what is even more meaningful is that both companies are manufacturers of spare parts for futuristic cars—an industry which Daegu aspires to be known for worldwide. The city of Daegu will do everything in its power to support the activities of these two companies to promote their respective corporate growths and the transformation of Daegu into a hub city for futuristic cars.”
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